London bourse suffers worst week since 1987

The battered London Stock Exchange, which has just suffered its worst week since the 1987 stock market crash, will be on high alert next week for signs that Britain could fall into recession in the fourth quarter.
The FTSE 100 index of leading shares closed Friday at 3,932.06 points, a 21.05 percent plunge from the end of trading seven days earlier, October 3.
Economists are warning that the exchange could eventually fall below 3,300 points. Analyst Justin Urguhart Stewart of Seven Investment Management said the measures taken by governments this week to ease the financial crisis and spur critical credit flows had to succeed.
Investors will have the week end to digest the outcome of a key meeting of Group of Seven finance chiefs, who were meeting Friday in Washington to discuss chances of mounting a united front against a burgeoning crisis of confidence on world markets. The meeting of top finance officials from Britain, Canada, France, Germany, Italy, Japan and the United States, will produce a communique that investors and analysts the world over will then de-construct.
"Markets will begin next week in the wake of the Washington G7 meeting, the publication of the communique and US Treasury Secretary Hank Paulson's press conference," said Philip Shaw of Investec.
"After this week's internationally co-ordinated cut in rates we do not think that there will be any other major measures announced, but we cannot be completely sure!" Central banks in Europe, the United States and Asia announced emergency interest rate cuts this past week that nonetheless failed to reassure the interbank market, where lending has all but dried up as confidence erodes. Shaw meanwhile predicted that British inflation figures to be released Tuesday will reveal a record 5.0 percent reading in annual terms.
A downturn in momentum could become apparent on Wednesday with the publication of British jobless figures. Economists foresee the jobless rate going from 5.5 to 5.6 percent of the workforce in the three months to August 31. September producer prices, to be released Monday, should show a 0.1 percent decline from August and an 8.9 percent gain compared with September 2007.
Companies reporting financial results in the week ahead include confectioner Cadbury, brewer SABMiller and drinks group Diageo. Mining giant Rio Tinto will release its third quarter production figures.